Iceberg order - Financial definition
Financial acronyms
The entire acronym collection of this site is now also available offline with this new app for iPhone and iPad.
Concise definition of the term iceberg order
A large market order that is divided into, and fed to the market, in small quantities, usually by the use of an order management system.
Comprehensive definition of the term iceberg order
When large participants, such as institutional investors, need to buy and sell large amounts of securities for their portfolios, they can divide their large orders into smaller parts so that the public sees only a small portion of the order at a time. The image behind the name is that of only the ‘tip of the iceberg’ being visible to the market.
The purpose of an iceberg order is to avoid triggering large price movements in the market which would be the consequence of a substantial change in a security's supply or demand.